Brazilian president promises to change oil royalties' distribution

20:04, December 08, 2010      

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Brazilian President Luiz Inacio Lula da Silva said Tuesday he would submit another bill to the Congress to change the distribution of oil revenues in the country.

Under the bill, the oil royalties would be divided among all states in the country, while the oil-producing states would not suffer a loss of income, he said.

Lula said he wanted to veto the Ibsen bill passed by the Congress, which will divide the oil royalties equally among all Brazilian states.

It was the first time that the president, who has the power to veto the bill, publicly expressed his intention on the matter.

The president said that Brazil had enough resources to ensure its oil-producing states, such as Rio de Janeiro and Sao Paulo, do not suffer losses, and other states get a larger share.

Earlier this year, Lula said that the issue was going to be resolved by the Congress, and he wouldn't interfere.

Currently, a large share of the oil royalties in Brazil goes to the states and cities from which the oil is extracted, while the rest is distributed among the remaining states and the federal government.

Brazil's House of Representatives and the Senate approved the Ibsen bill earlier this year, but the move provoked vehement protests from the country's oil-producing states, which claimed that the bill is unconstitutional and would ruin their economies.

Source: Xinhua


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